Because it was buggy, known for security holes and the single biggest source of application crashes in all software in the late 90's through early 00's.
This is a stupid conspiracy given Apple decided not to support Flash on iPhone since before Jobs came around on third-party apps. (The iPhone was launched with a vision of Apple-only native apps and HTML5 web apps. The latter's performance forced Cupertino's hand into launching the App Store. Then they saw the golden goose.)
HTML5 was new and not widely supported, the web was WAY more fragmented back then, to put things in perspective, Internet Explorer still had the largest market share, by far. The only thing that could provide the user with a rich interactive experience was Flash, it was also ubiquitous.
Flash was the biggest threat to Apple's App Store; this wasn't a conspiracy, it was evident back then but I can see why it is not evident to you in 2025. Jobs open letter was just a formal declaration of war.
Yes. It was a bad bet on the open web by Apple. But it was the one they took when they decided not to support Flash with the original iPhone's launch.
> Flash was the biggest threat to Apple's App Store
Flash was not supported since before there was an App Store. Since before Apple deigned to tolerate third-party native apps.
You can argue that following the App Store's launch, Apple's choice to not start supporting Flash was influenced by pecuinary interests. But it's ahistoric to suggest the reason for the original decision was based on interests Cupertino had ruled out at the time.
That 1T figure is real, but it includes things like if you buy a refrigerator using the Amazon iOS app.